Foreign investment in bourses declines

A 12 per cent decline has been registered in foreign portfolio investment in stock exchanges in just about one week, showing a withdrawal of $41 million through special convertible rupee account (SCRA).

According to data released by the State Bank of Pakistan (SBP), foreign investment now stands at $298.768 million, down from $320.593 million which was registered on November 7, 2006. A major withdrawal of investment was witnessed on November 7, when foreign investors mainly from the UK and the US resorted to net outflow of $20 million in one day due to variety of reasons.

Till then, another withdrawal of $21.793 million has been made amid dwindling values of stocks in the country during November 8-11. Investors from the UK withdrew $0.595 million on November 10, followed by investors from the US who removed investment to the tune of $0.175 million during the day. Other leading withdrawals were made by investors from Singapore and Hong Kong.

Since the onset of current financial year, a sustained increase was witnessed until October 2006. Portfolio investment had been at $97 million at the beginning of October last and later it swelled to $107.893 million on October 2. On October 4, the cumulative net inflow augmented to at $170 million.

The figure of foreign investment increased to around 300 million till end of October. Keeping in view upward trend, market insiders had been vocal that portfolio investment could touch the mark of $500 million in current fiscal.

However, a downtrend was started in the second week of November. Unlike previous trend, overall foreign investment in stock exchanges of the country has been consolidating, especially for last several months of current fiscal. Between March-September, period, a decline has been witnessed in investment. July was the worst month when investment declined sharply to $29 million.

Source: The News